Tags: consumer | spending | income | economy

Gallup: Consumer Spending Down $5 a Day From 2014

By    |   Monday, 02 March 2015 10:09 AM

Gasoline prices may have plunged in recent months, but apparently that's not making consumers feel any wealthier.

Americans report spending $82 a day on average in February, according to a Gallup poll. While that's little changed from $81 in January, it's down 9 percent from $87 a year earlier.

For the survey Gallup asks respondents to estimate daily what they spent the day before at restaurants, gas stations, stores or online, excluding home and auto purchases.

Non-wealthy Americans accounted for the drop from last year. Middle- and lower-income Americans spent $71 in February, down 10 percent from $79 in February 2014.

So what accounts for the decline?

Gallup's Rebecca Riffkin notes that the firm's economic confidence index fell into negative territory during the third week of February and has stayed there since then.

"Furthermore, last year, a Harvard Business Review study found that consumers are less likely to spend money when it's cold," she states. Much of the country suffered from freezing weather last month.

"Given these factors, the lack of change in U.S. spending last month may not be surprising," Riffkin says.

When it comes to the entire economy, former Federal Reserve Chairman Alan Greenspan isn't so optimistic either.

The government Friday revised fourth-quarter GDP growth down to 2.2 percent from 2.6 percent. Growth for all of 2014 totaled 2.4 percent, the fastest pace since 2010.

The economy is "not strong," Greenspan tells CNBC. While the jobs market is strong, "we're getting evidence of weakened productivity," he notes. "That is a key statistic which tells how the economy is functioning."

Productivity dropped an annualized 1.8 percent in the fourth quarter.

In addition, heavy government entitlements are crowding out savings, which in turn is crowding out capital investment, Greenspan explains.

"Capital investment is key to productivity growth. That has slowed down quite dramatically, and productivity has followed right along."

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Gasoline prices may have plunged in recent months, but apparently that's not making consumers feel any wealthier.
consumer, spending, income, economy
311
2015-09-02
Monday, 02 March 2015 10:09 AM
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